Managing a reliable and robust supply base is a key priority for global organizations looking to maximize supply chain efficiency and customer availability. Ensuring suppliers have timely visibility of your requirements and can align their operations to optimize the flow of product supply can drive significant efficiencies for both parties.
So how does the supply chain leader continually align supply to the real demand and deliver this business value? Stryker Osteosynthesis provides a striking example of how one leading company has implemented new capabilities to manage its supply base and ensure supply is aligned to demand.
Stryker Osteosynthesis is a provider of reconstructive, trauma and spinal products in the medical technology industry. Since 1941, Stryker has grown to a position of global leadership in the $35.6 billion orthopedic market, providing a range of products that improve medical professionals’ and patients’ lives in more than 120 countries.
Due to volatility in demand, issues with inventory quality and delays in product availability, Stryker was struggling to ensure that its products would be available when needed. In the healthcare field, it is essential for medical professionals to have instant access to supplies. Having a patient wait for an implant that is out of stock, for example, could be life-threatening.
From Stryker’s distribution centers to the end hospitals, Stryker’s customers expect high, 24/7 service levels on practically all product offerings. Given the nature of this demand, a key supply chain challenge Stryker faced involved conflicting goals among high service levels and low inventory levels. Essentially, Stryker must continually ensure that inventory is neither in excess nor out of stock.
Such a business-dependent mandate, however, proves difficult to fulfill without strong visibility along the supply chain. Without deep supply chain visibility and without knowing the exact number of products in distribution and in the supply chain, Stryker was unable to optimize its operational effectiveness and efficiencies.
Specifically, Stryker encountered the bullwhip effect, which stems from incorrect forecasts and which created additional supply chain challenges. With numerous links in its supply chain, Stryker needed a way to address the demand variability that risked potential inventory excess or stockouts.
Moreover, Stryker’s operational efficiency suffered from inconsistent inbound/outbound performance and manufacturing loads, hindering the company’s ability to operate a stable, uniform-capacity load required for optimized process efficiencies. Stryker felt increasing pressure from manufacturing and supply chain costs, ultimately affecting the company’s bottom line.
After initially discussing the adoption of a vendor-managed inventory (VMI) project, Stryker first thoroughly reviewed its supply chain to determine which parts would benefit from a VMI tool. Upon assessing its extensive supply chain, Stryker decided to start at the beginning of the supply chain, focusing more on the company’s suppliers and distribution centers and less on its branches and the end customers.
Stryker evaluated several prospective VMI tools, and ultimately decided that partnering with TradeBeam and its i-Supply inventory management solution was the best choice due to its real-time visibility and single tool/view offering.
CDC TradeBeam is a global trade management software and services company, offering solutions to streamline global trading processes for enterprises and their partners. TradeBeam helps companies optimize their global supply chain through increased collaboration with suppliers, supply chain partners and regulatory authorities, improving visibility and reducing the costs and risks associated with international trade.